Rumours that Google will launch a music service have been circulating for a while. So, what will this long-anticipated product, expected to be released at the end of the year, look like? It appears we've come one step closer to finding out. Billboard reported this week that the internet giant is circulating a proposal among major labels for an a la carte download store and a subscription-model, cloud-based storage locker, with the company supplying a web-based music player and a mobile application for playback of tracks.

The download store will operate in a conventional manner (though there's no mention of price at this time), though the company wants customers to be able to "preview" entire songs once, after which they would be limited to a 30-second sample. This might prove to be an obstacle for Google – iTunes tried to extend their sample time to 90 seconds last week, but "forgot" to ask permission from the collection societies for songwriters, so the idea is currently on hold (I'd be fine with an extension, but it's funny how getting licences from songwriters always seem to be an afterthought for music services).

The music locker will, like Spotify, We7 and iTunes' newly launched Ping, have social networking features. For $25 a year, consumers will be able to store songs in the cloud and access them on any internet-connected device by either streaming or downloading. Fellow subscribers will be able to listen to each song sent to them on a playlist in its entirety once.

Any music that Google has licensed would be accessible to the user from their cloud-based account. This includes tracks purchased from any retailer, ripped from a CD or downloaded from peer-to-peer networks such as Rapidshare and Pirate Bay – which may prove to be another obstacle to Google getting licences for tracks in the first place. I suspect the majors will expect Google to do something about P2P sites appearing at the top of music searches, as well as Google Android apps that facilitate P2P access.

Google proposes a 50/50 split between itself and the labels (master rights holders), with composers and their publishers receiving a 10.5% share – though it's not clear if that share will come off the top, or out of the labels' or Google's share.

So, is this a good or bad deal for artists and songwriters? Of course, there's the usual risk of revenue ending up in the "blackbox" (non-attributable revenue that ends up staying with the label). They also have reason to view any deal offered by the search-engine company with suspicion. Google owns YouTube and pushed PRS, the not-for-profit collection society for songwriters and composers, into a terrible deal last year, arguing that YouTube was a loss-making venture. A publisher asked a Google executive at the time why they didn't shut YouTube down if, as they claimed, it lost $365m a year. The answer may be that it wasn't as loss-making as we were led to believe – less than a year after the deal was signed it's reportedly brought in $450m in revenue. Though the deal was covered by a non disclosure agreement, sources say Google only had to pay the PRS a flat fee of less than £10m for three years. Considering YouTube's traffic has increased by 50% over the past year with music videos receiving 2bn views a week, a flat fee seems unfair. Lady Gaga's Bad Romance has had 278m views so far, but it's probably only made producer RedOne what a decent busker could earn in a day.

What's also telling is that Google hasn't approached any indie labels about its music service. Does this mean it's not interested in having this year's Mercury winners, the xx, included in its new music service? Or Arctic Monkeys, Dizzee Rascal and other chart-topping independent acts? "As usual, they'll make a deal with the majors and expect the independents to be happy to pick at the leftovers," according to my source at one of the larger indie labels. "I don't understand why they always have to act like this. We're happy to license – we license more services than the majors."

Does Google care? It still doesn't have a YouTube licence in place with Beggars, one of the world's biggest independents (the xx is one of its acts). Google knows few smaller labels would dare take them to task – a tiny blues label recently took them to court and ended up being countersued. In Google-land, it appears not all artists are created equal. The jury's out on if it cares about artists at all.